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TMI Blog2010 (6) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant-company on an allegation that it is not in a position to pay its debts. According to the respondent, the appellant by its letter dated November 5, 2001, acknowledged its liability to pay a sum of Rs. 6,61,540.27 to the respondent. This debt was not paid by the appellant-company though promised. Ultimately, a statutory notice was issued. It was claimed that in the reply to the statutory notice, again the debt was acknowledged but the payment was not made. Therefore, the company petition was filed. 2. There was only one defence raised by the company, namely, that the debt is time barred. Before the learned single judge, it appears two contentions were raised (i) that giving of C form along with letter dated September 19, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment in the case of Canara Bank v. Vijay Shamrao Ghatole [1996] 5 Bom. CR 338, has clearly held that an implied promise to pay a time barred debt is not covered by section 25 of the Indian Contract Act. Observations made by the Division Bench in paragraphs 15 and 16 of that judgment are relevant. They read as under : 15. It is, thus, clear from the perusal of section 25(3) of the Contract Act that when there is a promise to pay the time barred debt made in writing as envisaged therein, it is treated as a contract and therefore such a promise would furnish a fresh cause of action to the creditor. The dispute between the parties upon the construction of section 25(3) of the Contract Act is that according to learned counsel for the plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch is binding upon us in preference to the view taken by the Single Bench of this court in the judgments (cited supra) relied upon on behalf of the plaintiff-bank." (emphasis supplied) 5. It is, thus, clear that for enabling a person to institute a suit for recovery of a time barred debt on the basis of the provisions of section 25(3) of the Indian Contract Act, there has to be express promise to pay and not implied promise, as has been held by the learned single judge. Therefore, the finding of the learned single judge is clearly contrary to the law laid down by the Division Bench in the case of Canara Bank [1996] 5 Bom. CR 338 referred to above. Learned counsel appearing for the original petitioner tried to submit that the learned singl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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